I.  Today's News:   

1. IT Cir. No. 2 - Explanatory Notes to the Provisions of the Finance Act, 2011  (Click for detail)

2. CL Cir. No. 10 - Guidelines for declaring a financial Insitution as Public Financial Institution under section 4A of the Companies Act, 1956  (Click for detail)

3. Chartered accountants exams to be made more transparent: Jaydeep Shah  (Click for detail)

4. Service tax trouble for BCCI  (Click for detail)

5. Govt. Hikes GPF Interest Rate to 8.8%  (Click for detail)

6. RBI - Circular No. 129, dated 21.05.2012 (Risk Management and Inter Bank Dealings)  (Click for detail)

II.  Useful Case laws:

1.   Ambala Central Cooperative Bank Ltd. v. ITO, IT Appeal No. 332 (Chd.) of 2012, Date of Judgement 23/05/2012, ITAT - CHANDIGARH

The Chandigarh Tribunal observed as under :

"…..we would like to take this opportunity to bring to the notice of CBDT that after the procedure of Central processing of returns, many issues have come before various forums where unnecessary demands have been raised due to non-grant of TDS, wrong computation of income, adjustment of the previous year demand which have already been deleted by the jurisdictional assessing officer. Therefore, we would like to urge the CBDT to take up this matter urgently and establish proper coordination between the assessing authority and Central Processing Authority so that these problems are immediately solved and unnecessary litigation can be avoided. Copy of this order should be forwarded to the Chief Commissioner of Income-tax, Chandigarh and Chairman of CBDT for necessary action."

(Please Click Here for Judgment)

2.   M/s Phool Singh Yadav & Co., Gurgaon Vs. CIT, ITA No. 278 of 2005 &  79 of 2004, Date of decision: 17/04/2012, High Court of Punjab and Haryana

Issue:

Whether the assessee could book its expenses on accrual basis and receipts on actual receipt basis and not account for work-in progress in the closing stock?

Held:

The assessee has followed mercantile system of accountancy in regard to the expenditure incurred during that year and results were declared on actual receipt and this method is constantly followed by the assessee since last so many years, therefore, addition of the amount received in the next year in the month of April should not have been added in the previous year merely on the basis of bills issued and expenditure shown in the assessment year.

(Please Click Here for Judgment)

3.   M/s All Cargo Global Logistics Ltd. Vs. DCIT, ITA Nos. 5018 to 5022 & 5059/M/10, Date of pronouncement: 21-05-2012, ITAT Special Bench – Mumbai

The assessee filed an appeal before the Tribunal in which it raised the ground (in Form 36) that u/s 153A, the AO was not entitled to make additions which were not based on incriminating material found during the search. This ground was not raised before the AO or the CIT (A). Before the Special Bench, the department argued that as the ground was not raised before the lower authorities, it was an additional ground and could not be entertained. HELD by the Special Bench:

On the question whether such a ground can be raised for the first time before the Tribunal, the subject matter of an appeal consist of three elements (a) the grounds taken in the memorandum of appeal, (b) the grounds for which leave is allowed by the Tribunal and (c) grounds taken by the respondent for supporting the order of the CIT(A). The Tribunal is not confined only to issues arising out of the appeal before the CIT(A) but has the discretion to allow a new ground to be raised. If a pure question of law arises for which facts are on record of the authorities below, the question should be allowed to be raised if it is necessary to assess the correct tax liability. The submission that the ground could not be raised earlier as the assessee did not have the services of an advocate at its command is reasonable and bona-fide.

(Please Click Here for Judgment)

Key of Success :

"The three simple tips to play safe in life
    (i)  Don't promise when you are happy.
    (ii)    Don't reply when you are angry.     
   (iii)   Don't decide when you are sad."   

Thanks for your valuable time

"Voice of CA"